Is Canada Actually Going to End its Temporary Foreign Worker Program?

One of the very interesting elements of this debate is that it isn’t just one political party calling for an overhaul. It seems to be finding approval with some politicians across Canada’s Conservative party and even the NDP. Meanwhile, a new Abacus poll suggests around 44% of Canadians want the TFWP to be eliminated to reduce Canada’s historically high youth unemployment.  

Key Takeaways 

• Canada’s youth unemployment rates are historically high – higher than any other time since 2010, excluding the pandemic.  
• Some politicians are calling to end the TFWP to ‘solve’ the youth unemployment crisis. 
• Ending the temporary foreign worker program will cause other issues – likely higher consumer costs, which will be politically unpopular. It may not solve the youth unemployment problem, either.  
• Other solutions will be needed to encourage Canadian workers to consider lower-wage roles, and to encourage employers to hire Canadian talent.  

What’s Behind the Calls to End Canada’s Temporary Foreign Worker Program?  

We don’t want to ignore that Canada is developing a pattern of blaming immigrants for all the country’s woes.  

We saw this recently with Canada’s housing crisis, when international students were blamed for increasing housing costs. The reality is that it’s more complicated than international students pushing up prices. As we understand it, there’s a complex web of monetary policy, bureaucracy, and some governmental failures that provided the foundation for the housing crisis – with the influx of students simply providing the tipping point.  

But, temporary residents are an easy scapegoat – and public support for immigration fell drastically throughout 2024. This ultimately led to reduced temporary immigration levels planned for 2025-2027. Yes, rental prices have dropped across much of Canada over the last 12 months (though, they’re still among the highest in the world). But, educational providers (particularly in rural and regional areas) are also struggling financially without the huge influx of cash from international students, and this has negative impacts on the experience of Canadian students too. 

It seems we’re seeing this same cycle play out again now, with the calls to end the temporary foreign worker program. That is – blame immigrants, prompt a huge overhaul in an immigration program, and then see variable results.  

So, where are we with immigration and Canada’s Youth unemployment?  

Are Foreign Workers Causing Canada’s Youth Unemployment Crisis? 

The reality is that Canada is experiencing a very real and heartbreaking surge in youth unemployment. Canada’s youth unemployment rates in July and August 2025 are the highest since 2010 (outside of the pandemic years) — at 14.5%. It’s even higher for return students, at 17.9% on average between May and August.  

However, high unemployment amongst Canadian youths does not automatically mean temporary foreign workers or the TFWP are to blame.  

Like with housing, the causes behind high youth unemployment are extremely complex – and it’s our strong belief that simply eradicating the TFWP won’t automatically solve the issue. In fact, it may worsen Canada’s affordability crisis.  

A recent Desjardins report suggests that the youth unemployment crisis is caused by:  

• Current economic weakness.  

• The changing nature of work, particularly the gig economy.  

• Rising labour costs prompting investment in labour-saving technologies.  

• AI-advancements impacting entry-level work.  

• Finally, the increase in young, temporary residents.  

Anecdotally, we also think that many international workers are ready and willing to work for wages that aren’t attractive to Canadian workers. Faced with the option of paying a local worker significantly more than a temporary foreign worker, employers are incentivized to choose cheaper labour – especially since many of those temporary workers will have gained previous experience elsewhere. This is where the increased cost of living risk comes in.  

If Canadian employers are forced to hire Canadian workers at higher rates, that cost will most likely be passed onto the consumer. That, or the employer will hire fewer workers (or both!). We seriously doubt that the popularity of the call for the TFWP to end would continue if Canadians knew it would likely mean higher costs they’d need to pay across many sectors, including for groceries.  

What Is The Solution Then? 

We aren’t saying that there is no need for reform in the TFWP. It is rife for exploitation from Canadian employers, and it’s challenging for temporary foreign workers too – since they don’t always have a clear path to permanent residence. 

In terms of changes to the TFWP, the prevailing wage requirements for low-wage LMIAs is a good place to start. For context, IRCC requires employers to pay foreign workers a ‘prevailing wage’ which is the higher of the median wage on Job Bank or a wage within the range that you’re paying current employees in the same role.  We don’t think that the prevailing wages outlined in the Job Bank necessarily truly reflect the wages that Canadian workers would accept. Updating the wages to show 20% above the prevailing wage for low wage roles could ease some of the downwards pressure on wages caused by temporary workers in low wage roles.  

But simply getting rid of it won’t solve the Canadian youth unemployment crisis overnight – especially since the TFWP only makes up a part of Canada’s overall temporary foreign worker numbers.  

Canada has approved 105,000 TFWP work permits this year, but temporary workers also come to Canada through the International Mobility Program (IMP). This includes international students on a Post-Graduation Work Permit, and young workers on working holidays through the IEC. In fact, over 300,000 work permits were approved through Canada’s IMP between January and June 2025.  

As a result, it’s likely that a multi-pronged approach would be more effective. Starting with more effective data on which temporary foreign workers are taking the roles that Canadian youth would otherwise work in. (We’d guess it’s not the TFWP for the most part!) 

Briefly, here’s what we suggest the government consider:  

1. Introduce age-based minimum wages – like what exists in the UK and Australia. Alberta and Ontario both have minimum wages for workers younger than 18 that are lower than the provincial minimum. However, models like Australia’s age-based minimum wage provide strong incentives for employers to hire young workers and train them – since they are cheaper at 15 than at 25. This early experience can be invaluable when it comes to advancing your career, even as a young worker.  
2. Low pay, lack of prestige, and tough working conditions are often why Canadian youth avoid certain roles. This could be offset by strengthening labour protections, enforcing fair scheduling, offering shift premiums, and ensuring workplaces are safe. Coupled with incentives for Canadian employers to hire local workers (even at rates higher than temporary workers would accept), this could encourage a shift in interest for younger workers.  
3. Consider further restricting work hours for international students as a temporary public policy, through to 2027. We know this one won’t be popular for international students. 

Unfortunately, these solutions would likely come with a bump in the cost of goods and services to Canadian consumers (except perhaps the age-based minimum wage suggestion, which could level costs for employers).  

At the end of the day, whether Canada’s temporary foreign worker program would be significantly reformed will hinge on whether an increased cost of living is a price we’re willing to pay for greater access to employment for Canada’s young workers.  

We think that the most likely outcome is some public policy changes to Canada’s LMIA-supported temporary worker programs in the near future – particularly the low-wage LMIA stream.  

However, the economic reality is that Canada needs immigration – so we wouldn’t expect the TFWP to be entirely eliminated. At most, we predict it would be ‘re-launched’ under a different name.